Staring it in the face: Japan handles geopolitics in-house

20 Apr 2018

Asia Pacific

Japan

Charles Hecker

Staring it in the face: Japan handles geopolitics in-house

The approach into Tokyo’s Haneda Airport, hard against the city at the edge of Tokyo Bay, doesn’t reveal the Japanese capital in the best light. The early morning approach is across a brutal, maritime-industrial landscape.

Then again, who cares how the neighbourhood looks? Haneda’s proximity to the centre of Tokyo makes it a thing of rare beauty. A few turns of the wheel, and you’re in the middle of the megacity. You want bucolic airports? Head for Switzerland.

Tokyo is utterly engrossing and frustratingly impenetrable, usually at the same time. And it is very difficult to leave – departing always feels like disentangling. Once home, though, the days away immediately feel distant. The trip takes on a time-out-of-time quality.

Repeat visits to colleagues and clients in Japan make the trip more familiar, but never less novel. Being a return visitor means dispensing with places you feel you have to visit, and enjoying the places you want to visit. That is, of course, only after finishing the day’s meetings and answering emails from yesterday, today and, I think, missives from tomorrow, too. Someone in a hemisphere somewhere is always sending email while you’re in Japan.

My most recent trip came to one of several crescendos as we assembled clients and friends for a RiskMap 2018 event. This year felt different, not solely due to a rare and ferocious blizzard on the day. The real storms were elsewhere.

The Japanese business community was still recovering from the shock induced by the United States’ withdrawal from Trans-Pacific Partnership (TPP), a painstakingly negotiated Obama-era trade pact that economic nationalism scuttled. North Korea had recently flown a test missile over the Japanese archipelago; the missile’s carcass pierced commercial aviation routes on its way into the Pacific Ocean. Prime Minister Shinzo Abe was still deciding whether he would make a controversial visit to the 2018 Winter Olympics in South Korea, a perennial nation-irritant in Japanese politics.

We dove into the two-steps-forward, one-step-back dance of Washington DC policy-making. We mapped where Xi was taking China. We sought to calm frayed nerves over the long-term trajectory of the conflict on the Korean peninsula. Beyond that: risks and opportunities in the Mexican automotive sector, and the broader meaning of the Russian elections.

It is in the routine work of political risk analysts to unfurl maps and describe the terrain. Our objectivity, and the methodology behind it, serves an important purpose. But Japan lives geopolitical risk every day. Along with glutinous rice and the world’s freshest fish, geopolitics (extra wasabi whether you like it or not) is a staple of the Japanese diet. Even as a few of our RiskMap guests drifted gently off to sleep, we knew that everyone in the room took these issues seriously. (We don’t take seminar-snoozing personally – at least not in Tokyo.)

It was, however, a bracing splash in the face to meet with fellow politics geeks at the geopolitical think-tanks inside of some of Japan’s largest companies. Let’s examine that for a minute – entire in-house teams of experienced analysts entirely immersed in global affairs. How many companies around the world can boast that sort of internal richesse? In Japan’s largest companies and trading houses, this is the rule, not the exception. These hybrid academic/commercial beacons help steer their parent companies through a rapidly changing world. They are voracious consumers of geopolitical analysis.

They also give as good as they get. Control Risks for 2018 is looking at the United States as two countries – the global superpower and the domestic republic. While laying out that argument, painstakingly assembled by our lead US analyst Jonathan Wood, I got a shot across the bow from the think tank at one of Japan’s most famous companies.

Point taken, but, well, maybe. Usually, a country’s domestic policy and its foreign policy work with each other, not at cross purposes. We think that in 2018, the “two Americas” are going to come into conflict – over trade.

As I wrote this, the White House was rather fractiously considering slapping soaring tariffs on imported steel and aluminium. (The tariff debate already claimed the scalp of chief economic advisor Gary Cohn.) Amid the prominent criticisms of the proposed protectionist plan is the notion that American business and American consumers – the domestic republic – will suffer the most. The president believes that the global superpower will win. Talk of a global trade war is premature, but there is clearly ample room for skirmishes. At least China seems to be keeping a cool head for now.

Elsewhere on the company think-tank circuit, Russia was front of brain; in others, North Korea. There is no shortage of concerns.
There can, however, be too much of a good thing. It was easy to overload on this particular staple.